Many governments try to stabilize commodity prices based on the widespread belief that households value price stability and that the poor especially benefit from food price stabilization. We derive an exact measure of multivariate price risk aversion and of associated household willingness to...

Many governments have tried to stabilize commodity prices based on the widespread belief that households in developing countries – especially poorer ones – value price stability, defined here as the lack of fluctuations around a mean price level. We derive a measure of multivariate price...